Standard

Rev.09/03/03

HRT 206 - Food, Beverage, And Labor Cost Control

Course Description

A study of the principles of cost controls and their application to food and beverage operations. Emphasis is placed upon the diverse elements of sales within a food and beverage establishment and upon cost controls needed to maintain a profitable operation. Topics include: costs and sales relationship, forecasting sales, preparing budgets, cost control systems, controlling inventory, and computer equipment and software.

Competency Areas	Hours
Costs and Sales Relationship	Class	4
Forecasting Sales	D. Lab	1
Preparing Budgets	P. Lab/O.B.I.	0
Cost Control Systems	Credit	4
Controlling Inventory
Computer Equipment and Software

Prerequisite:	MAT 111 (diploma) or MAT 196 (degree)
Corequisite:

Course Guide

Competency	After completing this section, the student will:	Hours
		Class	D.Lab	P.Lab/ O.B.I.

COSTS AND SALES RELATIONSHIP		4	1	0
Terminology	Define the term cost as it applies to food, beverage, and labor cost controls.
	Define the term sales as it applies to food, beverage, and labor controls.
	Define the term cost-to-sales ratio as it applies to food, beverage, and labor cost controls.
	Define the terms standards, procedures, budget, quality standards, and quantity standards as they apply to food, beverage, and labor cost controls.
	Define controls as it applies to food, beverage, and labor cost controls.
Cost-to-sales	Cite the formulas used in calculating cost-to-sales ratio as applied to food, beverage, and labor cost controls.
	List the factors in the cost-to-sales relationship for food, beverage, and labor cost controls.
	Describe the procedure used in matching cost-with-sales as applied to food, beverage, and labor cost controls.
Controls	Describe management's responsibility for food, beverage, and labor cost control.
	Give examples of various techniques used in food, beverage, and labor cost control.
	List the steps involved in the food, beverage, and labor cost control process.
	Prepare an operating budget for an activity in the hospitality industry.
	Describe cost benefit ratio as a factor in the control decision for food, beverage, and labor cost control.
Cost/volume/profit	Explain the cost/volume/profit relationship as applied to food, beverage, and labor cost control.
	Calculate sales in dollars and units.
	Calculate variable costs as applied to food, beverage, and labor cost control.
	Calculate the break-even point as applied to food, beverage, and labor cost control.
	Graphically illustrate a break-even computation as applied to food, beverage, and labor cost control.
	Give examples of ways of changing the break-even point for food, beverage, and labor cost control.
Electronic data processing	Discuss the development of electronic data processing as applied to food, beverage, and labor cost control.
	List the various computer generated outputs managers use for food, beverage, and labor cost control
	Describe the process which provides electronically generated outputs for managers involved with food, beverage, and labor cost control.
FORECASTING SALES		4	1	0
Terminology	Define sales history as it applies to forecasting sales and controlling production.
	Define the term forecasting as applied to food, beverage, and labor cost control.
Popularity index	Compute the popularity index and interpret the results.
Production controls	Explain how to forecast portions sold in food and beverage sales.
	Describe the use of a production sheet to calculate production needs.
	Describe the procedures used in controlling high-cost entrees.
	Explain the difference in portions consumed and portions sold calculations as applied to food production controls.
Computer programs	Describe the use of computer software programs for maintaining sales histories and their use in forecasting sales and production control
Void sheet	Explain the use of the void sheet for food and beverage cost controls.
PREPARING BUDGETS		4	1	0
Terminology	Define the terms operating budget, static budget, and flexible budget as they apply to food, beverage, and labor cost control.
Budget process	Describe the steps involved in preparing an operating budget for a food/beverage establishment.
	Prepare a static budget for a hospitality industry operation.
	Prepare a flexible budget for a hospitality industry operation.
Anticipated changes	Give examples of anticipated changes for a hospitality industry operation and explain how this information is used in preparing the budget.
COST CONTROL SYSTEMS		20	5	0
Food purchasing	List the characteristics of effective purchasing control as applied to food and cost control
	Distinguish between perishable and nonperishable food as applied to restaurant operations.
	Contrast purchasing procedures for perishable food with those for nonperishable foods.
Food receiving	List the characteristics of an effective receiving procedure as applied to food cost control.
	Describe the duties of a restaurant receiving clerk.
	Explain the use of an invoice in food receiving operations of a restaurant.
	Describe the information contained on a meat tag and why a meat tag is used in restaurant operations.
	Distinguish between the terms directs and stores as they apply to restaurant operations.
	Give an example of the application of computer programs to receiving procedures as applied to restaurant operations.
Storing/issuing/transfers	Discuss temperature control, container sizing, shelving, cleanliness, and location as factors in food cost control.
	Explain the principle of stock rotation as it applies to restaurant operations.
	Discuss the use of computer programs for controlling, storing, issuing, and transfer of foods as applied to restaurant operations.
Food inventory	Describe the procedures for taking an end-of-month inventory of restaurant food supplies.
	Explain the methods used to assign costs to units of food in a restaurant inventory
	Distinguish between opening inventory and closing inventory in restaurant operations.
	Calculate cost of food consumed, cost of food sold, food cost percent, and cost per dollar sale as applied to restaurant operations.
Daily food cost	Compute daily cost of food, food cost percentage, and cumulative cost percentage as applied to restaurant operations.
	Explain the relationship between book inventory and actual inventory.
	Discuss the use of computer programs to establish data and generate reports on daily food costs for restaurant operations
Beverage purchasing/ receiving/storing/ issuing	Define the terms par stack, bin cards, full bottle sales, coding, perpetual inventory, and mixers as they apply to beverage cost control.
	Identify the person(s) responsible for beverage purchasing control for a beverage-serving operation.
	Distinguish between call brands and pouring brands as applied to beverage-serving operations.
	List the factors involved in an effective beverage-storing procedure.
	Contrast issuing procedures for front bars, service bars, and special purpose bars.
Beverage production	Define the terms shot glass, jigger, stemware, mixer, straight drink, mixed drink, cocktail, and standard bar recipe as they apply to beverage cost control.
	Give an example of applying computer programs to controlling beverage production costs in bar operations.
Labor cost	Define labor cost control as it applies to food and beverage operations.
	List the determinants of labor cost as associated with food and beverage operations.
Variable/fixed personnel costs	Distinguish between variable and fixed personnel costs as applied to the food and beverage operations
Work organization	List the preliminary steps involved in work organization for food and beverage operations.
	Prepare an organizational chart for a food or beverage operation
	Prepare a table of staffing requirements for a food or beverage operation.
	Write a job description for a position in the food and beverage operation.
Business volume	Develop an analysis of business volume for a food or beverage operation.
Performance standards	List and explain the methods for establishing performance standards for food and beverage operations.
	Prepare a table of hourly requirements and use to identify staffing requirements for a food or beverage operation.
	Give an example of a computer program which is used to collect labor cost data for food and beverage operations.
CONTROLLING INVENTORY		4	1	0
Periodic/perpetual	Contrast the periodic method of food and beverage inventory control with the perpetual method.
	Develop a food/beverage inventory control report.
	Describe the factors involved in controlling inventory for a food or beverage operation.
	Discuss the indicators for increasing or decreasing inventory for a food or beverage operation.
	Discuss the use of computer generated data in controlling inventory for food and beverage operations.
COMPUTER EQUIPMENT AND SOFTWARE		4	1	0
Hardware requirements	Discuss the factors involved in determining computer hardware selection for a specific volume level in a food or beverage operation.
	List the equipment needed to meet electronic data processing requirements for a specific size food or beverage operation.
Software requirements	Name the computer software programs which are available for independent food and beverage establishments.
	Discuss the software programs developed for franchised food and beverage establishments.
System advantages	List the advantages of electronic data processing when compared with other mechanical devices for information processing.
	Discuss how electronic data processing systems aid in the control of food, beverage, and labor costs.
System capabilities	Name the basic capabilities of a computer system which apply to food and beverage operations.
Coding media	List the types of coding media used in electronic data processing systems for food and beverage operations.

Suggested Resources

Dittmer, P. R., & Griffin, G. G. (1984). Principles of food, beverage, & labor cost controls for hotels and restaurants (3rd ed.). New York: Van Nos Reinhold.

Ninemeier, J. D. (1990). Management of food and beverage operations (2nd ed.). East Lansing, MI: Educational Institute, American Hotel & Motel Assn.